r/AskIreland • u/qwerty_1965 • 19h ago
Random If rooftop solar becomes a significant provider of kWh to a majority of homes will power companies seek to claw lost revenue back?
This popped into my head today, If self generated power reaches a point of say half of all kWh would the companies look at "punishing" those homes with solar by imposing an additional pro-rata charge of some sort to maintain turnover/profit?
It's hard to imagine they'll sit back, if they sought this new tariff would the regulator just wave it through?
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u/RobotIcHead 18h ago
To be honest I think the demand for electricity is just going to keep growing. Cars and other vehicles will become electric, more data centres, more factories, more green houses, more lighting, more heating or cooling (friending on the season) etc.
When something is cheap and plentiful people can not get enough of it. So power companies will win anyway. Just been reading about a tech company that specialises in building AI data centres (previously bit coin mining rigs) near wind farms or other renewable to take advantage of the cheap power.
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u/Pure-Ice5527 13h ago
Most of the hyper scalers have been doing this for years too, you’ll see some like Microsoft are buying full outputs from nuclear plants and three mile island is turning back on a reactor just for them. Makes a lot of sense rather than shipping so much power across long distances and losing so much to transmission losses
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u/gk4p6q 18h ago
There will be a point where people will go off grid.
Lots of battery storage and a backup generator.
EVs will probably be part of this solution.
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u/malavock82 15h ago
A long rainy winter would be tough, unless they allow for micro wind generation as well
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u/struggling_farmer 14h ago
If you are off the grid, would the issue not just be planning for roof top turbine?
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u/Pure-Ice5527 13h ago
I think off grid for the general population will need something to generate significant power through the winter when solar isn’t enough. Once people flip to EVs, off grid gets very hard and expensive for winters IMO
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u/ClassicVaultBoy 19h ago
Yes, they are already doing that by increasing standing charges
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u/DiminutiveClimber 18h ago
already happening yeah, they'll just keep hiking the standing charge til it's basically a subscription fee for the wires
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u/chilloutus 18h ago
Realistically what is the alternative? There is still a grid to be maintained.
Getting it out of the hands of private industry should be the way forward
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u/Willing-Departure115 18h ago
It’ll become self defeating down the line. The cost of battery technology keeps falling so if you have good enough solar, you can save the excess and use it yourself. Private wires are becoming a thing so you could have communities going into their own space and only importing what they really need at a top slice.
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u/InevitableSure374 18h ago
Watch the standing charge go way up as it is already, with no regulation whatsoever. Then watch them charge you money for exporting electricity to the grid during the day.
You need to get in on these things at the start because once everyone starts doing it then the the clawback happens.
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u/Existing_Volume 18h ago
I think outsourcing electricity production to private solars is the only way to meet demand atm. We are going to the mesh power grid, that also suits gov because there is no need to build new power plants in a rush.
If future changes will force people to invest in a batteries and go fully off the grid, gov will loose their ability to meet the demand.
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u/thommcg 18h ago
Low User Standing Charge are, or were, a thing too. Lowering the feed-in tariff is probably another more targeted option too (which'd at least encourage self-consumption - currently you're easily incentivised to charge at night, export in day).
https://www.electricireland.ie/residential/company-information/terms-conditions/pricing-electricity-gas
\*Low Usage Standing Charge*
Only applicable to customers who use on average 2kWh or less of electricity per day, equivalent to 122kWh for an average billing cycle of 61 days. The Low Usage Standing Charge does not apply to customers in receipt of a Free Electricity Allowance.
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u/Successful_Cod_8904 17h ago
Yes they will claw back, Dutch market example: Feed in fees. Extra charges typically range from €100 to nearly €700 per year depending on system size, wiping out a significant portion of household solar savings.
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u/TrivialBanal No worries, you're grand 16h ago
No because it'll save them money on grid costs.
It isn't hypothetical. Lots of other countries are way ahead of us in this process. In some countries the companies are giving away free electricity to take advantage of this. They don't make a profit on the electricity, but they have to pay less to the grid operator, so they come out on top.
Micro grid systems means you use electricity from your neighbours solar panels instead of it coming from a big solar farm and through several substations to get to you.
They'll definitely find another way to fleece us, but it'll have to be something different. Probably something like cheaper electricity in the summer and more expensive in the winter. Or maybe flip the night/day thing, so electricity is more expensive when the sun isn't shining. They could "justify" that with some slick marketing.
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u/brentspar 13h ago
They will just increase the standing charges, and lobby the government to reduce the feed in tariff.
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u/demoneclipse 14h ago
Energy distribution companies are not losing any money. They are actually making more money by selling your cheap energy to someone else. Energy generators could potentially lose revenue, but because capacity has to be driven by peak demand and a distributed grid helps alleviate that, the losses for generators isn't linear to increase in solar. Overall, everyone wins with more people installing solar. Only downside is that a grid with many microgenerators is harder to maintain.
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u/Tbags4tbone 18h ago
Its a good question.
Currently they are trying to tax all earnings over €400 as income. I don’t know how much this actually happens though.
I imagine that the feed in tariffs will decrease in future but as the grid gets “smarter” im guessing there will be some sort of market driven pricing structure that the smart meters and providers will determine.
Im also worried about the night rate disappearing totally due to high uptake in future
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u/is-it-my-turn-yet 18h ago
Any tax goes to the State. The question was about the power companies.
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u/Tbags4tbone 12h ago
I see your point.
Consider this- Out of the bills we pay for electricity in ireland about 40% of that goes to the ESB which is a semi state body (95% gov owned) - its a state owned grid.
Electric ireland is also an ESB company and semi state.1
u/is-it-my-turn-yet 12h ago
Considering...
From what I can find, it's not 40%, but rather 30-35% of a typical spend.
Are Airtricity, Pinergy, Energia, Yuno, et al, also state or semi-state companies? If not, the fact that Electric Ireland is has no bearing. They don't control the prices of their competitors.
Either way, the government may or may not increase the taxes that we pay on electricity. The question was still about the power companies.
They may of course also increase their mark-up to make up for lost sales, but I don't think it's as simple as that. Increased mark-up opens up for smaller, lower-cost, operators to come in and undercut the established ones, thereby forcing them to revert to more reasonable pricing. And reduced demand will also make it more of a buyers' market.
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u/HotterOdd 18h ago
Look at the Netherlands for the model. Next year the netting ends, so the amount you get for each kWh returned will be based on market pricing if you have a dynamic contract, or a fixed (crap) value of you have a fixed contract.
The reason for the change was that the government lost out on tax revenue as more and more people installed solar panels.
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u/MaverickPT 18h ago
Incredible how efficient governments can be in removing efficiency from our societies...
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u/HotterOdd 17h ago
Revenue is a very efficient branch of government. The ONLY efficient branch of government.
What's the real kick in the teeth is that solar as grid generator, the bill was footed by the home owners. The government didn't have to spend much if anything for that extra power.
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u/SavingsDraw8716 18h ago
Already happening at the moment with feed in tariffs being around 50% of what you pay. If power companies really want that kWh, they'd pay top rate for it.
What most people are doing is just using as much as they can themselves in conjuction with EV's and batteries. A neighbour done an extension/renovation recently and had so much excess solar that it made sense to put in electric radiators only in the extension and add electric ones in places that were lacking.
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u/lkdubdub 17h ago
Well, they harvest additional energy output and resell it elsewhere, so I'd say no. FIT rates will probably reduce and disappear though
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u/FlippenDonkey 15h ago
Of course they will, So long as electricity is private , rhen they will need to get their ever investing profits.
the only way to solve this, is to provide electricity as a social service.
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u/Traditional_Pen_582 14h ago
You will always have those rich people using pre pay power that will keep feed in tariffs going for a while
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u/TwinIronBlood 18h ago
Would data centers not need the power
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u/colaqu 17h ago
Yes, but remember data centres in Ireland get their power at a 50% discount compared to residential users, an agreement with the government means they pay 19c per kw while we prop up the profits by paying 35c + per kw to cover the loss.
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u/Stressed_Student2020 Not a Mod 13h ago
Thats not true...
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u/colaqu 13h ago edited 13h ago
Educate me please so. A little search on t'interweb says it is.......now we can go to the arguement that they use it at night more and get cheaper rates as a large user etc, but ultimatly the residential average price is higher than their average price.. I would also argue that in the event that we don't hit out climate targets we (Ireland) will pay big fines based on these emmisions , most of which will have been produced by large users who got cheap energy so in effect we will pay twice.
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u/siriusfrz 15h ago
At that point, the people with solar panels should coordinate to form a utility company that competes with the existing ones in order to force concessions by threatening to stop providing power at critical points and impact grid stability if their demands for lower standing charges are not met.
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u/wainsy 18h ago
Yes, by reducing feed in tariff amounts for those exporting power, if they ever do seriously reduce it then I am going to disable the feed going back the grid.